Political instability and terrorism

As mentioned in the literature, political situation of any country has had great impact on the flow of tourists which can be proved as follows dividing the whole periods of eighteen years into different time intervals according to the increasing or decreasing trends of tourists.

4.2.1.1 From the period 1990 to 1995

Fig 4.5: Tourist arrivals (1990-95)

45 The figure 4.5 above indicates that total tourist arrivals have been found to be in increasing trend from 1990-1995 except the year 1993 that shows the decrease in total tourist arrivals by 12.19% consequently resulting in decrease of tourist arrivals by air by 15.42%. (See details in the table 4.2 below).

The result might be political reasons because in 1993, one of the strong political parties of Nepal (The United Nepal Communist Party) led several strikes and street demonstration in protest to the government keeping various demands. On ³May 16, 1993, a road accident in which two prominent communist leaders lost their lives led to further conflict between the government and the communists through allegations that the government had killed them.

In a protest and demonstration on June, July and September in 1993, 12 people were killed with police firing. This incident sent a very bad message worldwide citing Nepal as unsafe place to travel that resulted in decreasing tourist arrival by 12.19% but the number of tourist arrivals started increasing again after 1993 that shows this type of disturbance might affect for specific time period only.

Table 4.2: Percentage change in total tourist Vs percentage change in tourist by air Year % change in total tourists % change in tourist by air

1990-1991 14.95% 18.33%

1991-1992 14.11% 12.15%

1992-1993 ⁴(12.19)% (15.42)%

1993-1994 11.22% 13.87%

1994-1995 11.28% 12.32%

4.2.1.2 From the period 1999-2002

The continuous decreasing number of tourist arrivals in the fig 4.6 below from 1999 to 2002 might also be due to the political reason because the political circumstances in the country particularly after 1999, was never favorable for tourism development. Activities

3 The exact date of political events has been adapted from Economic policy paper by Rabindra Adhikari, 2005.

4 Bracket indicates negative value.

46 such as usual changes in the elected government, frequent street demonstration from opposition, holding election pre-maturely, anti- Indian demonstration, hijacking of an airplane, royal palace incident and emergency declaration continued providing poor messages about Nepal in the globe affecting destination marketing. Apart from the real political crisis, the situation is further aggravated by the media reports. The sporadic incidents of little importance on the safety and security of tourists are normally blown up to larger scale.

Fig. 4.6: Total tourists (1999-2002)

4.2.1.3 From the period 2000-2002:

Fig. 4.7: Total tourists (2000-2002) by month

47 The figure 4.7 above shows that tourists in the month of June immediately after the incident went down sharply as against in the June of 2000. It also shows that the number of tourist arrivals started increasing again from the month of July of same year 2001 again might be due to the next political situation of the country that the royal palace incident (royal family massacre) of 1^st June 2001 became the top story of the news centers worldwide.

Similarly, in the context of indian tourists, the figure 4.8 below shows that the number of indian tourist arrivals did not stabilize from June 2001 to September 2001, might be due to the royal palace incident that created very bad impression of Nepal.

Although the arrivals of tourists were stabilizing in the latter part of the year, October, November and December 2001 saw another outbreak of violence and the visitors halved again in comparison to the same period of previous year as shown in the figure 4.8 below.

Fig. 4.8: Indian tourists (2000-2002)

4.2.1.4 From the period 2002 – 2003

The figure 4.9 below shows the total number of tourist arrivals in 2003 was increased by 20% as compared to 2002 might be due to the positive political situation of the country because the successful hosting of SAARC summit in January 2002, which got good media attention, helped to create better destination image. An international campaign in the name

48 of “Destination Nepal” was launched the same year. However, the year 2003 was not completely crisis free, however, attempts to establish normalcy in the country is reflected in the number of tourist arrivals by air by over 20% over 2002. But, the program failed to achieve the objective to revive tourism in high scale for the escalating armed violence in the country.

Fig.4.9: Total tourists by air by month (2002-2003)

4.2.1.5 From the period 2004 – 2005

Fig.4.10: Total tourists by air by month (2004-2005)

The figure 4.10 above shows the dramatic decrease in the flow of tourists by air for the month of February 2005 in comparison to the same period last year by 43% due to bad political situation of the country because through a proclamation in February 2005, the then

49 King Gyanendra usurps absolute power and takes up the post of chairman of council of Ministers. The royal regime restricts political freedom, muzzles the media, cut off phone lines nationwide and blocks communication channels with the outside world, detains political figures and declared a state of emergency.

4.2.1.6 From the period 2005- 2007

Fig.4.11: Total tourists Vs tourists by air (2005-2007)

The figure 4.11 above shows that the total number of tourist arrivals and tourist arrivals by air was increased by 2.27% and 2.33% respectively in 2006 as compared to 2005 but the figures dramatically changed in 2007 in comparison to 2006 increased by 37.18% for total tourist arrivals and 27.09% for tourist arrivals by air might be due to another political reasons. Following the April 2006 people’s movement for democracy uprising, the Seven Party Alliance (SPA), interim government of Nepal and the Maoist Party (the rebel party) entered into a bilateral cease-fire and 25 point code of conduct on 26 May 2006. Further negotiations concluded with a Comprehensive Peace Agreement (CPA) between the interim government and Maoist on 21 November 2006, and a tri-partite agreement with the United Nations on the monitoring of the management of Arms and Armies process on 8 December, ending a decade of civil war and during this process, no any big incidents happened in a country for the year 2006.

50 4.2.1.7 From the period 2007 - 2008

Fig.4.12: Total tourists (2007-2008)

The figure 4.12 above shows that the year 2008 ended with whopping tourist arrivals with a total of 813561 tourists visited i.e. an increase of 67.74% in comparison to 2007, specially from the highest tourist generating markets, India, UK and US with the highest number of tourist arrivals from India, an increment of 11.2% in comparison to 2007, according to the Immigration Office, TIA. The highest number of tourist arrivals was 90923 from different countries found to be arrived in October. This again happened due to the political situation of the country because the joining of former rebel (Maoist) to the interim government and holding up of the election of Constituent Assembly to frame new constitution in the country on April 10, 2008, maintained political stability for certain periods and created peaceful situation on the country.

4.2.2 Terrorism

As explained in the literature, terrorism has had severe impact on air transport for tourism ultimately resulting in sharp decrease in international tourist arrivals.

4.2.2.1 From the period 1999-2001 Fig. 4.13: Total tourists Vs tourists by air (2001-2002)

51 The figure 4.13 above indicates that the total tourist arrivals and tourist arrivals by air were decreased in 2001 as compared to 2000 by 22% and 20.53% respectively. The reason was due to the effect of terrorism because although the year 1999 was a record year for Nepal from tourism point of view with nearly half a million tourist arrival, in fact, the crisis in tourism was observed from the year 2000, when tourist arrival began to decline. The hijacking episode of Indian Airlines from flight to Kathmandu (Nepal) to Delhi (India) in 2000 resulted suspension of all Indian Airlines flight to Kathmandu on the ground of insufficient security in the airport for six months.

The incident also damaged the peaceful image of Nepal due to negative propaganda In Indian Press in regard to the safety and security condition in the country. Immediately after the incident the numbers of Indian tourists were decreased by 30% in 2000 in comparison to the previous year as shown by the figure 4.14 below.

Fig 4.14: Indian tourists (1999-2001)

4.2.2.2 Impact of 9/11 and other terrorist activities in Nepal

The great 9/11 incident in the United States had crated very bad impact in Nepal. As shown in the figure 4.15 below, this caused sudden reduction in numbers of tourist arrivals after November 2001 and the effect in Nepal continued for the whole of 2002 decreasing overall number of tourists by 24%.

52 Fig. 4.15: Tourist arrivals by air by month (2001-2002)

Another reason was the attack on Indian Parliament on 13 December 2001 that resulted the suspension of PIA (Pakistan International Airlines) flight to Kathmandu (Nepal) because of air space sanction between India and Pakistan. This tension between two arch rivals made the region most vulnerable to travel for the whole of 2002. The decrease in number of international tourist arrivals is obvious in the figure 4.16 below from the period of December 2001 to February 2002 and sharp decrease in Indian tourists, in particular from the period of December 2001 to April 2002 which was again started recovering after October 2002.

Fig. 4.16: Indian tourists (2001-2002)

4.2.2.3 For the period 2002

The figure 4.17 below shows that the total number of tourist arrivals and tourist arrivals by air were decreased in 2002 as compared to 2001.

53 Fig.4.17: Total tourists Vs tourists by air (2001-2002)

The figure 4.18 below also shows that tourist arrivals for the month of October and November were decreased in comparison to the number of tourist arrivals same period last year. This situation was created might be due to the impact of terrorism because the Bali bombing case (Indonesia) of October 2002, outbreak of SARS in South East Asian Countries with highest numbers of victims recorded in Hong Kong and China, deterred tourists to visit the region. The war against Iraq, the Tsunami incident was further deteriorating the situation of tourism in Nepal.

Fig 4.18: Total tourists by air by month (2001-2002)

54 4.3Economic factors